What is the “Super-Secret ‘Mainz’ Income Stream?”

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Today it’s finally time to get around to what has probably been the most-requested teaser ad of the last few weeks — if you haven’t seen it, it comes in under several different headlines all comparing this “Mainz” income stream to the thousands raked in by Bill Clinton, Barack Obama, and teases us that we can also get a piece of what is “one of the great low-risk ways to get rich in America.”

So I can see why so many folks are asking. I, too, would like to get rich with low-risk. Preferably, I’d also like to start with very little money (Oh, wait, I’ve got that part covered!)

How do they get our attention and try to convince us to subscribe to Matt Badiali’s S&A Resource Report? Here’s a taste:

“Did you know former U.S. President Bill Clinton collects more than $84,550 PER MONTH in personal income… all thanks to one super-secret income stream!

“And here’s the best part…

“Regular Americans are now cashing in on this secret as well…”

I’ll spare you some of the foofaraw that chews up a few pages in this teaser ad (or 10 minutes of your life, if you’re actually watching the video version of the ad — something I never have the patience to do), but Badiali apparently uses this “Mainz” term because Mainz, Germany was the birthplace of modern printing (Gutenberg’s movable type, etc.). That modern printing technique enabled, for the first time, mass production of intellectual and creative work … which made it possible to make money by creating that work in the form of … royalties.

Yes, this is all just a big spiel to sell you on the idea that royalties are a nice way to get rich (don’t worry, there are some specific investments too — more on that in a moment). Of course, most of us are not going to get rich in quite the way Bill Clinton did, by writing a popular memoir and collecting a monthly payout for the royalties on the book, but investors certainly do invest in royalty streams even if they didn’t create the original work — one of the few financially sensible things Michael Jackson did was buy the Beatles catalog, after all, and he earned the income from those hugely popular songs for years.

And more importantly, there are also several publicly traded entities that generate royalties — Badiali gives examples of a few of the esoteric ones in his ad that he’s not specifically recommending, like the one that gets royalties from use of the A&W Root Beer name (that’s actually a Canadian income fund, trades at AW in Toronto and AWRRF on the pink sheets) and the one that gets royalties from a 25,000 song catalog including standards like “Little Drummer Boy” (that’s the Mills Music Trust, ticker is MMTRS over the counter but it almost never trades, has a trailing yield of about 8.5%).

But those who recognize the name probably know that Matt Badiali is a resource investor, so it will not surprise you to hear that the “Mainz” income streams he’s actually recommending generate their royalties from oil and gas — and thankfully, he provides a few clues about which of these investments he likes.

He first tells us that owning royalty interests is better than ordinary oil and gas stocks because the potential returns are bigger (he gives an example of one royalty company that was 500X more profitable than ExxonMobil stock over the past dozen or so years); and the investment is safer (royalty companies don’t generally take on the risky exploration or production, they just own royalties and sit back to collect their money if the project pans out).

Plus, of course, there’s that lovely income bit, which clearly appeals to lots of investors — he tells us that if we buy the four investments in his special report, which he calls Oil and Gas Royalties: The Real Secret to Generating Huge Returns in America’s Petroleum Market, that we’ll be getting royalty checks, on average, once every nine days.

So which four investments is he recommending? Well, you can ask him if you want, and he’ll tell you if you sign up for a subscription to his newsletter … or you can read on as we check out the clues and feed ’em into the mighty, mighty Thinkolator to see which companies these are.

Ready? Number one …

“New oil & gas royalty stream NOW ONLINE

“As I’ve shown, the absolute best time to get in on these royalty interests is at the beginning…

“And, not too long ago, a new royalty interest went public on the New York Stock Exchange…

“Since going public, this investment is up 219%. But as we’ve seen with other royalty interests… these gains are just the very tip of the iceberg.

“This income stream enables you to collect royalties from more than 3 MILLION acres of oil and gas rich land in 25 states, including: The Williston Basin of North Dakota and Montana, the Marcellus Shale region of Pennsylvania and New York, the Barnett Shale region of Texas, and the Fayetteville Shale of Arkansas.

“Not to mention, dozens of other oil and gas-rich properties in Oklahoma, Colorado, Louisiana, New Mexico, and Utah just to name a few.

“In fact, since going public in 2003, this investment has outperformed all major U.S. oil and gas stocks like Exxon, Chevron, Shell, and ConocoPhilips”

Well, this is a bit of an oddity — the match is not exactly perfect, but from those clues it sounds to me like Badiali must here be teasing a stock I own as well, Dorchester Minerals. Dorchester is a press-shy Master Limited Partnership (MLP) that owns mineral rights on over three million acres in 25 states, and yes, they do have acreage in those key areas — Williston/Bakken, Marcellus, Barnett, Fayetteville, etc. The share price is not up 219% since they were created in 2003, but you can probably get to that number if you reinvest the distributions — DMLPs distribution policy is to essentially pay out as much as they can of their incoming revenue, so like most MLPs they pay out far more than their “earnings” and much of it is classified as “return of capital” and just reduces your tax basis (meaning it’s effectively tax-deferred). Unlike the “real” depleting trusts, DMLP has some flexibility and can reinvest or acquire new assets.

As I said it’s not a perfect match — they have not grown their ol reserves 43% over the last four years, nor have they grown the gas reserves 500% over that time period … like most royalty and trust-based investments, DMLP earns income from wasting assets, meaning that they’re essentially turning reserves into cash, they’re focused more on maintaining and replenishing reserves (as a way to keep the cash flow coming in the future) than on growing them. Their overall reserves are down slightly for the life of the company, though they’ve replaced about 2/3 of what they’ve depleted, and the reserve level is probably down 10% or so from where it was in 2005. Still, they do have some divisions that have booked big reserves growth — their Net Profits Interest properties have booked something like 500% reserve growth over five years and those are mostly in gas, but that’s just a portion of their assets. So I could be wrong on this, but I’m unaware of any royalty-based companies that went public in 2003 and have this kind of footprint.

As I said, I own Dorchester shares (units, really) and I also profiled them this month for the Irregulars (before I bought them — this is a recent purchase), so if you want to see a more exhaustive look at the stock you can check that out here if you’re a paying member of the site. I like the decent royalty pass-through income (yield around 6%), but I also think there’s more room for growth than investors seem to appreciate.

If you think I’m wrong about this one, I’m listening. But in the meantime, there are three more:

“Royalty Stream #2

“This income stream enables you to collect royalties from more than 3,950 natural gas wells in the San Juan Basin of New Mexico (one of the largest and most productive gas fields in the country). If you’d put $10,000 into this opportunity ten years ago, you’d be sitting on more than $205,000 today. So far, this royalty stream has mailed 273 consecutive oil checks to shareholders. Even if they never acquire another cubic foot of natural gas … they have enough reserves to keep sending you royalty checks until 2020!”

Well, you won’t be surprised at this name: This must be San Juan Basin Royalty Trust (SJT), which owns a 75% royalty on net income (almost all from natural gas) from the wells (almost all operated by ConocoPhilips) in that basin. And yes, they have said that “conservative estimates” indicate at least another 10-15 years of life for the trust (meaning, there’s a least enough profitable reserves left to produce in the basin). SJT is a grantor trust, like most US energy trusts, so they can’t do anything — they just collect the money.

If there are more wells drilled on their parcels that produce more gas then their income goes up, and new reserves can be booked on their existing holdings, but the trust itself can’t invest in new royalties, buy new land, or anything like that they take expenses off the top and maintain a small reserve but otherwise just send whatever cash comes in out to unitholders as a monthly dividend (taxable as income, though the taxes can be a bit trickier than a standard stock when you account for return of capital and/or depletion allowances … still might be easier than MLP K-1 tax forms, I haven’t ever owned one of these and I’m not sure).

But we’ve got a couple more to find — what are they?

“Royalty Stream #3

“This royalty stream enables you to collect royalties from the Hugoton field of Kansas, the San Juan Basin field of New Mexico and Colorado, and the Yellow Creek field of Wyoming. That’s more than 140,000 acres of oil-rich property (and more than 1,700 wells). So far, this royalty stream has mailed 272 consecutive oil checks to shareholders. A $10,000 investment 22 years ago would be worth more than $75,000 today.”

I think this one must be the tiny Mesa Royalty Trust (MTR), which is indeed in the Hugoton Field, the San Juan basin, and the Yellow Creek Field — most of their income comes from the San Juan Basin, just FYI, and like most royalty trusts they calculate your distribution amount monthly.

And one more …

“Royalty Stream #4

“This royalty stream enables you to collect lucrative gas royalties from more than 1,600 wells in one of the largest domestic natural gas producing areas in America. This unique investment hasn’t missed a monthly royalty payout since it began 11 years ago. That’s 136 consecutive payouts. A $10,000 investment back then would be worth more than $54,000.”

I think this one must be Hugoton Royalty Trust (HGT), which owns the net profit interest royalties of some XTO (now ExxonMobil) producing gas fields, mostly in the Hugoton Field but also elsewhere. They did go public in 1999, and XTO distributed the shares they had held in 2006.

Most of these trusts are fairly similar, with the distinctions generally coming in the fields they own properties on and the level of proven reserves, and the expected remaining life in those reserves. Most of them are also valued more or less similarly, with almost all of these trusts owned predominantly by individual investors who buy and sell based largely on the yield, with assumptions about future natural gas prices (most trusts hold royalties predominantly on gas properties) and the depletion rate for those royalties (which often, from what I can tell, ranges from 3-7%).

The yield for most of these trusts is currently in the 6% range (Hugoton’s trailing yield is a bit higher, around 8% — which would tell you, probably, that investors think the profitable life of that trust will be shorter, or they’re likely to distribute less in the future than they did in the past), and as with other income-producing investments they compete for investor attention with bonds, REITs, MLPs and other high-dividend investments, so if bond yields go up dramatically, for example, the yield on these trusts would likely have to rise as well, which, absent increases in the distribution from higher gas prices or higher production, would mean that the unit price would have to drop.

As always with any depleting trust, do be careful about reinvesting your distributions — it can work extremely well to compound your returns and I almost always do so for my income-producing investments, but depleting trusts are different: if the reserves are depleting too fast and the life of the trust starts to shorten, investors will drive the share price down to make sure the yield gets them a good overall return for the expected life of the trust (to simplify: for example, if the trust says they have five years of expected production left you’d be crazy to buy shares with a 10% yield — that means you’re planning to invest $10 and get only $5 back in five years, you’d want at least a 20% yield to make sure you get at least your original investment back … all else being equal, which it rarely is). Every investor has to make that decision for themselves, just something to be aware of as you calculate your version of the future. Higher yield almost always means shorter expected life (or some trust-specific negative, things like a weaker producer or rising costs, for example).

The life of the trust can always expand if new production is identified on land where they own a royalty interest, or if prices go higher, it’s just that they can’t go out and buy a new property next door to keep the money flowing. Trusts are created with the idea that they will eventually expire, though they can certainly continue producing for far longer than the initial reserves would have predicted, since more discoveries, new extraction technologies, or higher prices that make more extraction profitable can all increase reserves. One publicly traded trust has decided to euthanize itself and distribute the proceeds to unitholders (That’s Torch Energy Royalty (TRU), I don’t know the story of this one but shareholders made the call to disband almost three years ago — they’re apparently still paying distributions as they liquidate the trust).

And likewise, do note that trusts and royalty owners generally have very little power over their property — they collect what is produced, but they don’t usually get a say in how much to produce, and they can take a big hit if wells are shut in because of bad performance, or because oil or gas prices fall too much to make the wells profitable for the operator. Trusts generally are formed for stable, producing assets, as most of these are to the best of my knowledge (which varies greatly), but be careful about assuming any “guarantee” about the level of future production — or about future energy prices.

If you’d like to learn more about trusts or about a few of the newer ones, there was a good article this month in Oil & Gas Financial Journal about trusts, including the more recent ones to come public and about the general appeal of them for energy producers (they can monetize some of their reserves and continue to operate the wells, and get money to expand without diluting shareholders directly or borrowing). If you want to know about all the US-listed royalty trusts, (one of which is actually a holder of royalties on oil and gas production in Germany, but almost all others are US-only production) tickerspy maintains an “index” of them here.
Full disclosure: In case you didn’t notice above, I do own units of Dorchester Minerals. I do not own any other stock/trust mentioned, nor have I yet written a bestseller to generate my own “Mainz” royalties … and I will not trade in any of the above investments for at least three days.

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51 Responses to What is the “Super-Secret ‘Mainz’ Income Stream?”

Thanks for this post. I have been really curious about this one.As you have said once you read " Matt Badiali" you know that we are dealing with natural resources. Btw am I the only one really annoyed with those teasing videos? Do people prefer the to the old letters.?

before u peoples do anything about this, u ned to go to non-participating royalties association, and read wat they hav to say about this shit. there is such a organization nown as the mineral rights forum,royality interests, and the definition of royalities as it is defind by investapedia. go there firss. cuz the rtest of these guys r onlies out 4 u r monies. dun git stupit!

If you want to know about the content of the teaser without watching the video, just hit the "close window" button as the video is loading. A pop-up will say "WAIT! Are you sure?" Then, if you hit the cancel button, the video will go away, and you'll see the letter.

Good suggestions all, but an even better approach is to just not click on the comeon when it says 'video'. I've also emailed customer service and told them how offensive it is to have a 'video' that is just a voice reading the words on the screen – as if none of us could read! The best approach, you will learn over time, is to just stick with the newsletters you like and avoid the new 'opportunities' that never are.

The first $1000 of income does not need to be claimed, however, if you hold MLPs in your IRA or 401K and the disbursements go over the $1000, then the administrator of the IRA/401K must sell enough securities to generate enough cash to pay for the taxes.

I just learned of a new ETF AMLP that is suited for IRAs. Not certain why, but the ETF is treated differently than individual MLPs.Brand new so no earnings or dividend info as yet. I may replace my Can Trusts before 2011 and the new laws regarding energy trusts go into effect. Bears watching. Again, the Obama folks may decide to change the status of MLPs to increase taxes.

While you rarely read about it, I have heard that there is another tax issue with regard to MLPs which made me decide to stay clear of them. I read that you must pay state income tax in every state in which the MLP operates–if that state has an income tax. This could become a true nightmare. I can envision myself sitting in prison for evading taxes–somewhere. Could someone who actually has owned enough of these to generate more than the exempt amount please comment on this? I have been reading about these for ages now, and even took a newsletter dedicated to MLPs, and this was never mentioned. I saw it in one place only. Oh, by the way, not all authors get royalty checks–never mind huge ones. I am still having royalties from my book sales going to pay off a small advance–over one year after the book was released. And my book was designated one of the "Best Books of 2009" by the "Library Journal," too. That's why I appreciate this site–I must make my portfolio work harder for me because books sales aren't going to be my path to much of an income stream, I fear.

See comment and reply to Dr. Diane above. Let's forget about IRA's for now. In a regular brokerage account – do you really have to file a tax return in states that pay royalties to its stock holders ???
That could be a prize pain. Is the $ 1000. of royalties exempt in a regular ( not IRA ) account ? Can anyone set me straight on this ?? I am impressed by the writeup, and was ready to plunk down my chips on Dorchestor until Dr. Diane ruint my day.

Yes you DO have to file a state tax return on royalities, as that is where the income/royalty is earned. I have a Fl. client who owns Stone Engergy in La and I have to file La taxes for her. Stone over the years has given them HUGE royalties, but I do not know what the original investment was, Stone is on it’s way down, royalties are getting less and less each year. But this could be good if you stick with one state, or find one that is in a state with no income tax.

THANKS TO ALL WHO HAVE FOCUSED ON EXPLAINING ABOUT THESE STOCKS AND NOT WORRYING ABOUT WEATHER THE LETTER COMES IN VIDEO OR NOT (WHO CARES) THAT IS THE WAY OF THE INTERNET, GET USED TO IT OR GET OFF OF IT.
IF YOU WANT A TAX FREE WAY TO MAKE MONEY, SEE HERE.. .http://www.wealthcreatingsystem.com/

the income stream is there if u hav the monies to do it with? 100k minimum? nuthin said about max/min. so go to investapedia for mor info. thisa royality is alot of crap. big bucks to git r dun. no 1 talks about the tax problums that cum wid it. look real hard about this and it will make u r eyes bleed. l.o.l. anuder daytrader.

It Is No Secret “Mainz” INCOME STREAM is Rip off August 15, [ 2012 · by Anon · in Business It is no secret I am leery about this tease from Matt Badiali from the Stansberry stable that yell about Obama’s tax returns. The Schedule “C” reporting income on Federal 1040 is business income, with a reduction of allowable business linked deductions. Instead it is net income from sales of books. Royalty income is usually reported on Schedule “E” Federal Form 1040, in view of that: the tease “Super secret Mainz INCOME STREAM” is a total misrepresentation of truth. Badiali has shown proof of testimonials and testify instances of people getting paid a monthly stream of income. Then he talks about three gold companies where an investor can receive a royalty stream, but only when an investor sells, just owning them is not going to create any income for you. More so, why the heck is he trying to sell his one-year trial subscription to The S&A Resource Report for $39 when, he can make many times more by following his own investment prophecy? Royalties on book sales and royalties on mineral rights are the same, and of course, misleading, you are not supposed to look behind the curtain, with such teasers. Submitted by Anon http://upsetreviews.com/2012/08/misnomer-is-super-secret-mainz-income-stream-of-obama/ ]
Expert answered|bongche|Points 3035|

You don’t need a newsletter or anything else to invest in Gold/Silver royalties. It’s just not that great an investment or everyone would be flocking to them. I greatly dislike these BS sales pitches that force you to sit through half an hour of misleading nonsense just to get to a newsletter offer. Gimme a break. Furthermore – this guy is buying national late-night radio time, he’s gotta sell a LOT Of $39/yr newsletters to break even (I used to be in the newsletter business). #EPIC FAIL

Please people, before you just focus on greed and continue investing in this type of thing, please at least educate yourselves on what these oil and gas companies are doing to the earth and the people who live near these wells. I own land that the mineral rights were leased out on (before I owned it), and at first it really didn’t seem to make a difference to me. I had no idea what it really meant. But after watching what happens when they put exploratory wells on the land (thankfully not ours, but many of our neighbors), I am horrified! It destroys the water, the land, and impacts the health of those living near them.

If you want to understand what you are actually investing in, check out the documentary “Gasland”. Google search it. I think you can even watch it on YouTube. From my personal experience, it is quite accurate. As much as I want to make money as an investor, I also want to leave a better life for our children. The oil and gas industry doesn’t give a crap if they poison all the water and give everyone cancer. It’s pretty frightening once you learn about the facts of what happens. Imagine being able to light your drinking water on fire…from the faucet. It’s not magic.

I’m sure some of you could care less, . That’s fine. But hopefully a few of you will at least get a little more educated on the reality of this drilling. If learning about it in more detail impacts you like it impacted me, hopefully we can invest in something that doesn’t destroy our water, land and air quality.

One of the testimonials in the video comes from a purchaser living in Tavares, Texas. Problem is, there is no city by that name in Texas. The city is located in Florida. This is one sloppy fraud. Nor does the purchaser live in that Florida city either.

Tobias – I'm another one annoyed with the videos. I subscribe to a few of the Stansberry services but never view the videos. Have dropped them an email and received a response which was basically just a form letter. Apparently the videos bring them a greater return than the letters, but I certainly don't like them.

I don't care for the videos, which are nothing more than someone reading the printing on the screen. The worst part is you can't pause or change the time, so once you start, you're stuck for some indeterminate amount of time. If interrupted at 20 minutes, you start over at zero.

jeff ,tobias, simply open the video, close the window , a secondary message will appear, click cancel and it will go to the tex form, for easy reading. for great returns on your investments, nat gas PEYTO.COM

Many MLPs do generate taxable income in multiple states, and as pass-through investments my understanding is that investors may have tax liabilities associated with those payments — there are probably mitigating factors, such as the fact that their cash flow that they distribute to untitholders is far in excess of taxable income, and the fact that income from a specific state has to be high enough to pass that state's threshold for filing a return. This is another headache of MLP investing in general, though I expect it doesn't directly impact most small individual investors — though whether that's because they're not following the rules or because the rules don't apply may be another question. I'm absolutely not an expert on taxation in any way, shape or form, so please rely on your tax advisor for the real answer.

I am a little slow in getting back to you, but I thank you for your reply–as well as your site. I did go to the website for the "National Association of Publically Traded Partnerships" and found the following under their link that dealt with state taxes. All of the following is directly quoted from their site:

"Because of the passthrough structure of PTPs, unitholders in multistate PTPs may owe tax in each state in which the PTP earns income. Because of the large number of unitholders in any PTP and the deductions that are available to offset the income, the average investor is unlikely to have any significant tax liability in the states where he or she is a nonresident."

They go on to say in the next paragraph:

"Each state with an individual income tax has its own rate structure, standard deduction, and threshholds for imposing tax. A table showing state income tax rates, income brackets and personal exemptions can be found on the website of the Federation of Tax Administrators website."

There are at least two sides to that — you do get simpler taxes and don't get taxed on the income, but you don't get the depletion allowance or any of the effective tax deferral that can be valuable for some people (similar in some ways to MLPs). I'd personally opt for these in a Roth if possible, but everyones situation is different (and I'm definitely NOT giving tax advice here, nor am I an expert on taxes in any way)

Symbol is PEYUF, but the site is interesting. CEO is lantern-jawed to say the least. Love the pic at the top left of the page. The overall trend is up, with occasional peaks… but the trend picks up where it left off at the end of the short-term peaks.

Seems like a good call to moi.

Oh, yeah: HATE the "videos" (which are nothing of the sort). But "stay on/leave this page" either works or doesn't. If not, I just go on about my bidness 'cos I ain't got 30 minutes to sit there and put up with the hype.

I saw that ad just now. The Chi-tab means Android tablets. But the Chinese chip company referred to – I am not sure who that is, and would very much like to know. Hopefully someone on this site will do an expose.

There were very few clues given so my guess is really a shot in the dark. I was thinking that it must be a chip supplier that all tablet OEMs would probably use. I looked for such a company with a market cap of $200-250 million. My wild guess is QUIK.

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Subscriber Reviews

I enjoy Matt’s newsletter, and always take the time to read it carefully because I’m interested in resource investing. He is very knowledgeable both financially and geologically. Sometimes his picks work out great, and sometimes not so great … I guess that’s true with all letters. But I think his reasoning is generally sound and he’s quick to admit it if he’s wrong. Sometimes he’s too early, and his pick may get stopped out before really taking off. He generally has several picks to choose from, with some being more conservative and some being more risk for more reward in his view.

Porter Stansberry”s S&A Resource Report is now saying Red China is buying and hoarding gold to use to back its currency and make it the world currency over the US Dollar. The effect on the US will greatly devalue our dollar and make our cost of living much lower. Even lower than our US government’s insane spend and debt will take us.
He mentions a way for individual investors to handle this is to buy gold miner’s stocks, especially the ones that are beginning to pay dividends in gold, not dollars. He is coy on listing them as he’d like to sell the list in his newsletters. Do any of you readers have a list you could share with the rest of us.?

I have kept track of Matt’s recommendations for the past year as well as I have bought into a few of them myself. He seems to be good at recognizing a company that has a great business model. Although I find that I am usually to late on an entry price by the time I receive the information I still watch the companies he researches for a while before I pull the trigger. I like his geological background which helps in picking resource stocks. however just like any newsletter you will find maybe 2-3 really good picks out of 25-30 that are published. I can’t help but think there are quite a few 2nd rate picks as they save the really good ones for the more expensive newsletters. (or for S&A’s own trading accounts) Overall I am happy with his research and ability to find good companies. His publications are a good read and very educational. I think his news letter is well worth the price you pay for it, but do your own research before puling the trigger on his picks, and most of all be patient.

First, their tout was part of a naggingly persistent inflammatory SPAM that continues to evade blocking – Townhall, so One Strike for even being associated with them. The come on states many accurate, but kind of DUH circumstances, that anyone can pretty much see just looking out their front door. Other over reaching statements and inaccuracies are purposeful in creating a “compelling buying proposition”. Strike Two. Smells like late night T.V. adverts.

Just Google map their address mentioned as a “Brownstone Mansion in the Historic Mt. Vernon district”, and check out the street view. Mansion? Here in Baltimore we call them row houses, and that particular block is mainly lawyers too cheap or not successful enough to afford a real office all their own. The bulk of the buildings there are multi-tenant, which is to say that they probably rent an office there, a very tiny room sized office. Given the abundance of empty commercial real estate in “The City that Breeds and Bleeds” it’s probably cheaper than renting a postal box at the U-Store-It.

The rest is what I feel should be common sense for anyone who is serious about not being separated from their money.

– If they’re so smart, how come they ain’t rich? If you had the “inside poop” on all of these great opportunities, why would you wish to “share” unless you were in a position to profit from a rush of OPM? If you are that insightful, and have the process so wired…why haven’t you retired on some exotic isle yet? Beyond that, again…if they’re that smart, why the “Class C” office space? Even the discount brokers in that area have “Class A” space there’s so much of it emptying around them. Most obviously, why are they hocking newsletters in the first place…and cheap ones at that. I guess like the churches and our politicians, they aren’t in it for the money, they’re just altruists with really huge hearts.

If you really want to waste $50 please just send it to me and I’ll send you emails each day spotting commodity prices that I’ve picked with my dart board and reminding you that the dollar is doomed.

I will give Matt credit for being smart. Smart enough to live in Florida rather than Baltimore City. Again, unless you are a drug dealer, in need of drugs, suicidal or a non-profiteer, there really is no reason to even venture into that abyss of a city. The only reason their murder rate doesn’t lead the world is because of the multitude of world class trauma facilities present (Johns Hopkins, University Hospital – Shock Trauma Center, etc.). They save hundreds that would simply die if they were shot or stabbed in Detroit. Baltimore??? Who the hell locates an office in Baltimore and why?

– Does anybody need a newsletter to point out that Keynes was an idiot and that taking money out of the economy to redistribute is utter stupidity? Do you need anything more than the sight of Ben “I’m the smartest guy in the room” to send you running for cover?

I would presume that if you’ve somehow managed to retain any kind of investment funds at this stage of the game that you are already smarter than the average bear and are better off sticking to what you know and doing due diligence without the insights of a newsletter hawker.

If you want to REALLY prepare for what’s ahead why look to the markets at all? Suggesting that this makes more sense than physically controlling real assets is just a shade away from the desperate pleadings of the equities whores.

If I’m worried about the future of food, maybe I should be planting a garden and buying some chickens. That’s how my grandparents got through the last Great Depression. I don’t seem to recall them sharing any stories about shale oil futures or hot stock tips saving the day.

Energy got ya down? Buy a couple of solar PV panels. They’re a lot less risky than commodities, at least as long as the sun keeps coming up. You don’t have to “invest” in a whole solar farm of hem, just get a few so if and when the lights go out you’ll still be able to see to reload in the middle of the night. Maybe buy a Nissan Leaf so you can be your own gas station with your little PV science experiment.

Look at what’s been done before. The smart money has already made all of the moves. The average schmoe is just chasing them down the road trying to not be the last guy across the bridge. If you weren’t part of the smart money you can still doubtless soften the blow, but silver at $11 sounded a whole lot better than silver at $40 – 100. Likewise gold. Even I thought I was crazy buying coins at $400 an ounce. I feel like Nostradamus now…and I’m a high school drop out. The closest I ever get to a formal economics education is having a beer next to somebody that used to teach it, and now they work for the Federal government.

Got hard currency? If the walls tumble tomorrow can you provide everything that you need to feed and protect your own? How does one actually convert those ETC’s to actual metal that can be used? If not, what do you have that you can barter or trade if things really get that bad? Can you fix a toilet or shoe a horse? How about set a broken bone or patch a leaky roof? Most of the essentials of today’s modern life require electricity and metal…can you make your own or make two pieces of metal stick together, or will you have to trade your shoes to someone else to do it for you?

The last two generations of Americans have moved steadily away from learning anything useful that requires sweat or manual skills, they all want to just “call the guy”. What happens when you call the guy and he’s not willing to accept your piles of Federal Reserve scrip or some plastic card? Makes a nice fire starter or a dandy shim for an wobbly table.

Do yourself a favor. If you can look at the horizon and see the realization of all of that Hope and Change as some kind of reality, get yee to a mental hospital. If you possess at least the common sense of a 5th grader, step back and evaluate just how self sufficient you really are. Have you ever lived through a massively retracting economy. I haven’t, …but I know and talk to plenty of older folks that have. I believe that was kind of the whole reason for recording history in the first place. So we could consult with the elders even after they were no longer here.

Look local now. Figure out what’s close to home. Bicycles powered China’s climb from the Stone Age. We can wave as we pass them on our way down. Can you grow and store your own food or will you end up imitating a Soviet comrade waiting in line for a chunk of lard and a stale loaf? If you do have all of the bases covered, how are you going to keep it and protect it from the “have nots”. What are you going to say if I decide that I like your stuff more than you. I’m a pretty big fella, and I wouldn’t have any compunction about bashing your skull in if it meant my family wouldn’t starve. How are ya gonna stop me?

Thanks to the socialists/fascist ideologues of the last hundred years we now have a fully integrated society where the have nots are living right next door to the haves in many cases. How much “Good Christian/Jewish” sacrifice are you going to feel like making when the grasshoppers keep begging at your door? How are you going to convince them to go away? What are you going to do if the government isn’t happy JUST redistributing wealth? Maybe they decide that they need to start redistributing the food that you have, or the resources that you possess. What are ya gonna do then?

It seems to me that with the world falling apart around us, that rather than waste your time looking for desperate investment opportunities to continue the charade, it would behoove everyone to start learning something useful instead.

Recent Reader Questions and Guest Articles

This is the first ticker specific discussion…..if it works, there may be many others. The aim is to have a chronological knowledge diary. If your comment is about ANYTHING other than $ARTH…please DONT post it here.

Mike Turner’s new newsletter has my interest now…he will share 3 hot stocks to buy per week, tell you what the buy price is, what the sell price is and what the target is. All of this costs you a measly 4.95/wk! Sounds like a reasonable price to give it a try. Any thoughts?

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